Always Better Cars, Always Better Lives

Each auto part is well-accounted forand neatly stored until these are ready tobe delivered at a specific production workstation, at a specific time.

A very organized traffic flow ofvehicles and people - creating anefficient process flow, as well asensuring the safety of motorists andpedestrians in the production area.





A Team Member uses a gravity-balancesystem, called karakuri, to transport andposition an Innova tailgate onto a weldingjig. This system saves energy and effort,compared to using an electronic or hydraulicsystem, and its use at TMP is the result ofcomprehensive kaizen.

The welding jig holds the part veryprecisely, to make the assembly operationeasier. Every spot, every seam ismeticulously attended to at the weldingline, applying Toyota’s highest standards.Precision is key in the welding process,hence, Team Members go throughcontinuous training to attain such mastery.



A Vios body shell enters the primer bath.The primer layer adheres to the steel on theinside, and the paint on the outside. It is moreefficient to apply this layer by submersion,rather than spraying, because it ensures thatthe primer will reach every single internal nookand cranny. The primer itself protects the steelagainst moisture and rust. The paint that will beapplied increases the protection, but is moreimportant cosmetically. Across, the Vios body shell is painted byrobots, above, then by human operators, whoseskill and vision are necessary to make sure thepaint reaches areas the robot cannot. Note howthe body is painted without the resin injection-molded bumpers. It is a challenge to make surethe color will be consistent.56





A team member works on a 2NR-FEgasoline engine to prepare it for installationin a Vios. This is a small engine, displacingonly 1496cc, but powerful enough for itssize. It is equipped with VVT-i (VariableValve Timing-intelligent) technology foreconomy and low emissions. This enginewas produced and assembled in Indonesia.



At left, a team member checks installation on a Vios underbody. Notethe lights in the floor illuminating the underbody to enable him to seeclearly. Above, installing components into an Innova tailgate assembly. Thetrolley on which the body shell sits allows the team members to move itfrom station to station manually. 61

Above, a team member uses a special assisting tool to install the rear seat of an Innova. The doors of the vehicle have been removed to facilitate installation of the interior components. This departure from conventional procedure has saved time and made the installation more accurate. At right, electrical components are checked by a special diagnostic machine.62



Manufacturing a product with manycomponents like a vehicle is no easy feat- the finished product must not only lookgood. More importantly, it should perform asit was designed. Problems may arise in the process.Solving these is important, but the key isto improve the process itself, so the sameproblems are not repeated in the future.Solving the process solves the problems.

“Kaizen spirit is to always improve. Today is better than yesterday, and tomorrow will be better than today. “The work in TMP, where growth is remarkable in Asia, is very exciting. It was very much helpful to my own experience to havebeen able to introduce particularly new technolog y, equipment and enhance genba (the workplace or work situation) by TPS (Toyota Production System).” MR. TOMOHIRO IWAMOTO Executive Vice President Manufacturing Division



At left, an Innova at the headlight aimingcheck station. Above and right, a Vios on the“rolling road” dynamometer. This sophisticatedinstrument precisely maps the car’s horsepowerand torque curves at the wheels, to compareit with specification. A team member ‘drives’the car, accelerating it to the specified speed.Note how the rear wheels are also spinning (theVios is a front wheel drive car). The output ofthe front wheels is made to overcome the dragof the rear wheels, to perfectly simulate theactual resistance of the whole drivetrain. ‘Windresistance’ has also been input into the frontrollers, to complete the accuracy. 67



This tunnel of lights is part of thequality control station for importedvehicles, and is especially designed toreveal even the tiniest flaw in the vehicle’sexternal appearance. Toyota is famouslyfanatical about the tiniest details, suchas the shut lines (gaps between panels),panel straightness, paint consistency, anddimensional stability.

A final check in the sun reveals flawsthat may not have been noticed in thelight tunnel. This vehicle looks about readyto be loaded onto one of the VehicleLogistics Center’s contracted car carriers,but it needs to pass this final factoryinspection. The process is relentless, andmore inspections will be conducted at thedelivery point.



”We are tasked with the processing of imported vehicles, until preparation for wholesale. These, together with sold CKD (locally produced) units, we deliver to the dealers. For thewhole process, we need to ensure vehicle quality, and safety of operators, while meeting the promised date of deliver y.” MS. AIMEE LOPEZ First Vice President Vehicle Logistics Department

Loading vehicles onto the car carriersis a process fraught with risk, like landinga plane on an aircraft carrier. The slightestmistake could cost the company large sums.It takes a lot of practice, not only to do it,but to do it quickly, accurately, and safely.The department must meet its throughputtargets, so the pressure is intense.

CUSTOMERDELIGHT Toyota has been a customer-centered organization from its very beginnings. Theconcept of customer delight is not merely a challenge to team members, it is practicallya product of the company. It is certainly the objective of the customer experiencedesigned by Toyota, and something it understands at a very deep level. Customer delight goes beyond customer satisfaction. Customer satisfaction is whenthe company delivers a product which meets expectations, in a manner or processthat also meets expectations. In other words, customer satisfaction is what is expected.Customer delight occurs when the company is able to provide something unexpectedthat pleases the customer. In other words, it is when the company goes the extra mile,for the customer’s benefit. Another factor that Toyota must anticipate is the customer’s “careabouts”. Thisunusual word is used simply because there is no common English word that can replaceit. It simply means the things a customer cares about. A careabout is an expectation that acustomer is particularly sensitive to, and it varies from customer to customer. Let’s talk first about expectations. If expectations are not met, you get the oppositeof customer satisfaction. Toyota already has the reputation of being a great carcompany, and the most successful one in the world, which is a double-edged sword.On the one hand, it means that more people will walk through the showroom doors.On the other, it also means that they expect a lot. Now let’s talk about careabouts. Again, they vary. Some customers care most aboutbeing respected. In fact, they may actually want to be treated like royalty, and this isnot an exaggeration. Other customers only really care about price. They don’t careparticularly whether you treat them with respect, they just want the lowest possibleprice. Yet other customers may care most about customization, in other words thatToyota should be able to provide a precise mix of colors, options and additions ordeletions. Still other customers care about their time. They don’t want an extendedconversation, or many forms to fill out, and most of all, they don’t want to wait in lineto speak to someone. The key to customer delight is thus simple: know expectations, and exceed themwhenever possible, and detect the particular careabouts, and address them. The wholeteam simply needs to pay attention to the customer, because every customer is different.74

The dealer showroom is the battlefieldwhere sales are won and lost. The Filipinocar buyer now has more choices andoptions than at any other time in history. Ithelps that Toyota makes a great product ata great price, but unless that is conveyedsuccessfully to the customer, the sale willnot be won. 75

The key team for delivering customer delight is the dealerships and sales and “We utilize the Voice of Customer toservice group. This is because they are the ones who interface most with the customer. detect and resolve problems earlier, and graspYet, every team member in the organization is actually involved in customer delight, real customer satisfaction situation at thefrom the facilities maintenance man who cleans the employee washrooms, to the dealerships. To develop and provide Heart-trainee who puts parts in trays, to the forklift driver, the welder, the final inspection touching Experiences to customers, we talkquality auditor, all the way up to the president of Toyota. to representatives of all our dealer outlets regularly and verbally. As an example, here is a true story of customer expectations, careabouts, anddelight, that happened at a Toyota dealership in July 2018. These are the actual words “Working for TMP made me embraceof a facebook post (used with permission): problem solving, and presenting solutions and ideas as a way of life. We never take no for an “I’m at Toyota ****** for my 9AM change oil appointment. After 4 hours of answer. There is always a way to do it, and wewaiting, I follow up the status and they haven’t even started working on the car yet. So never give up on any challenge given to us.”apparently, setting an appointment is worth jack s***. MS. PATRICIA ALEXIS HECHANOVA “What gets to me is that on a previous appointment I was late for a few minutes. I Group Headwas informed that we are required to be here 30 minutes before the actual appointment Customer Relations Departmentto be accommodated. Hence, I was turned away. “So if I was turned away for being late, what should be the equivalent consequencefor Toyota when they jumble up their service queue with me ending up waiting for apotential 6 hours? How can this situation be made ok?” “UPDATE: So after realizing their gaffe, the staff and management were ultrasympathetic, accommodating, and attentive. The process was expedited and I wasgiven 50% off on labor. They even footed the cafe bill on my cake and my coffee. All’swell that ends well. I’ve been here for service numerous times and was given excellentservice in previous visits. This is the first time they’ve had a mishap with me and I haveto say that it was handled and remedied excellently by their team. I won’t think twiceabout going back to Toyota ****** again. I’ll see everyone again for a 20,000 km checkup, with cake and coffee.” Lessons from this incident: 1. The customer’s expectation (we confirmed with the customer) was that the oil change should have been done within 2.5 to 3 hours, which was how long it took on previous appointments. This is already a very low expectation, because everybody knows an oil change can be done effectively in about half an hour, and this was not a walk-in customer, but a service appointment. 2. No one paid attention to the customer. Not only was the vehicle not queued properly (or even at all), but no one noticed, or cared that this person was already waiting for four hours. The dealer should have noticed that the customer had posted the complaint on Facebook because the dealership was tagged. The customer told us, “I tried to follow up earlier, but everyone was out on lunchbreak. No one could give me an update except for the service specialist. So I had towait until 1PM to even get an update.”76

“All’s well that ends well. I’ve been herefor service numerous times and was givenexcellent service in previous visits. “This is the first time they’ve had a mishapwith me and I have to say that it was handledand remedied excellently by their team. “I won’t think twice about going back toToyota ****** again. “I’ll see everyone again for a 20,000 kmcheck up, with cake and coffee.” The customer had even been turned away before from a scheduled appointment— which was literally, a disappointment—so there should have been a note on file to pay special attention to this customer. Service team really dropped the ball on this one. 3. The staff and management managed to not only reverse the situation, but were able to attain a customer delight scenario, by four important actions: a) They (finally) paid attention to the customer. The team was lucky that this customer reacted well to the attention. If he cared more about his time than being paid attention to, this would not have helped solve the problem, because there was no way the team could restore the lost time. b) They immediately admitted they were at fault. This is good, but many service organizations fail in this most basic step. They refuse to accept liability, out of fear for their own careers. It is a good thing that Toyota trains people what to do when a mistake is made. c) They did something about the complaint, by having the scheduled task performed right away. This also sounds obvious, but again, so many organizations do not empower employees enough to take decisive action. d) They offered the customer something unexpected, which was a discount and to pay for the customer’s snack. This single action, which exceeded the customer’s expectations and addressed his careabouts, changed the scenario from a minor public relations catastrophe (the customer has 2,300 Facebook friends) to a customer delight win. 77

A TOYOTA FOR EVERY MOBILIT Y NEEDMODEL INTRODUCTION TIMELINE 1989 1990 1991 1992 1993 1994 1995 Completely Knocked Down (CKD) or Semi-Knocked Down (SKD) Crown Lite Ace Corolla Hilux Lite Ace (SKD) Lite Ace Tamaraw FX Corona Crown (SKD) Corolla (SKD) Corolla Completely Built-Up (CBU) Hiace Land Cruiser 2004 2005 2006 2007 2008 2009 2010 2011 Completely Knocked Down (CKD) or Semi-Knocked Down (SKD) Corolla Altis Prius Alphard Innova Vios Completely Built-Up (CBU) Hilux Fortuner Camry AvanzaCURRENT MODEL LINE-UP Completely Built-Up (CBU) Completely Knocked Down (CKD) HATCHBACK SEDAN MPV SEDAN Wigo Yaris Corolla Altis Camry Vios Innova Prius c Prius78

Toyota recognizes that customers have varied needs when it comes to mobility. These may depend on status in life, family preference, financial capability, driving environment, plus a lot of other factors. Hence, over the years, TMP continues to improve its existing product line-up, as well as introduce new vehicles for discriminating tastes of new markets.1996 1997 1998 1999 2000 2001 2002 2003Corolla Tamaraw FX Camry Corolla Altis RevoCamry Land Cruiser Coaster Yaris ViosRav 4 PradoPrevia 20162012 2013 2014 2015 Innova 2017 2018Innova Vios Vios 86 FJ Cruiser Wigo RushPrius c MPV SUV OTHERSAvanza Rush Fortuner Hilux 86 Rav4 Land Cruiser Hiace Alphard Land Cruiser FJ Cruiser Coaster Prado 79

A DEALER OUTLET TOYOTA MARIKINACLOSER TO HOME To make Toyota more accessible to customers, TMP continues to embarkon an aggressive dealer network expansion program. In fact, starting 2011,TMP successively opened new Toyota dealer outlets at prime market areasall over the country. Several existing dealers have also undergone improvements in theirrespective facilities to better serve customers.DEALER NETWORK EXPANSION TOYOTA QUEZON AVENUE(as of end-July 2018) YEAR DEALER 2013 TOYOTA TACLOBAN, LEYTE, INC. (TTL) 1989 TOYOTA QUEZON AVENUE, INC. (TQA) TOYOTA PLARIDEL, BULACAN (TPB) TOYOTA SHAW, INC. (TSI) 2014 TOYOTA ISABELA, INC. (TIS) 1990 TOYOTA ALABANG, INC. (TAI) 2015 TOYOTA BUTUAN (TBT) TOYOTA CUBAO (TCI) 2016 TOYOTA CAMARINES SUR, INC. (TCS) 1993 TOYOTA BALINTAWAK, INC. (TBK) 2017 TOYOTA DUMAGUETE CITY (TDU) 1994 TOYOTA CEBU CITY, INC. (TCB) TOYOTA TAGUM CITY (TTC) 1995 TOYOTA PASIG (TPG) 2018 TOYOTA TAYTAY, RIZAL, INC. (TTR) TOYOTA OTIS, INC. (TOT) TOYOTA PUERTO PRINCESA CITY, INC. (TPP) 1997 TOYOTA ILOILO, INC. (TIL) TOYOTA TAGBILARAN CITY (TTB) TOYOTA PASONG TAMO, INC. (TPT) TOYOTA ZAMBOANGA CITY (TZC) 1998 TOYOTA DAVAO CITY, INC. (TDC) 1999 TOYOTA DAGUPAN CITY, INC. (TDG) TOYOTA ROXAS CITY (TRC) 2000 TOYOTA MANDAUE NORTH, CEBU (TMD-N) TOYOTA FAIRVIEW, INC. (TFV) 2001 TOYOTA CAGAYAN DE ORO, INC. (TCO) TOYOTA LIPA, BATANGAS, INC. (TLB) 2003 TOYOTA CABANATUAN CITY, INC. (TCC) TOYOTA TARLAC CITY (TTA) 2004 TOYOTA BATANGAS CITY, INC. (TBC) TOYOTA BATAAN, INC. (TBI) 2005 TOYOTA MARIKINA SERVICE STATION (TMSS) TOYOTA BACOOR, CAVITE, INC. (TBR) 2008 TOYOTA NORTH EDSA (TNE) TOYOTA ANGELES, PAMPANGA, INC. (TAP) 2011 TOYOTA MANILA BAY CORP. (TMBC) 2012 TOYOTA BACOLOD CITY (TBD) TOYOTA MATINA,DAVAO (TTC) TOYOTA BAGUIO CITY (TBG) TOYOTA TALISAY, CEBU (TTY) 2013 TOYOTA COMMONWEALTH, INC. (TCM) TOYOTA CALBAYOG, SAMAR (TCY) TOYOTA MAKATI, INC. (TMI) TOYOTA ILOCOS NORTE (TIN) TOYOTA DASMARINAS-CAVITE (TDM) TOYOTA AKLAN, INC. (TIN) TOYOTA SAN FERNANDO PAMPANGA, INC. (TSF) TOYOTA SANTA ROSA, LAGUNA, INC. (TSR) TOYOTA BICUTAN, PARANAQUE (TBP) TOYOTA KIDAPAWAN CITY (TKC) TOYOTA GENERAL SANTOS, INC. (TGS) TOYOTA MABOLO, CEBU, INC. (TML) TOYOTA ABAD SANTOS, MANILA (TAS) TOYOTA LAPU-LAPU, CEBU (TLL) TOYOTA GLOBAL CITY, INC. (TGC) TOYOTA ILIGAN CITY, INC. (TIC) TOYOTA LA UNION (TLU) TOYOTA SILANG, CAVITE, INC. (TSC) TOYOTA SAN PABLO, LAGUNA, INC. (TSP) TOYOTA CALAPAN CITY, INC. (TCA) TOYOTA CALAMBA, LAGUNA, INC. (TCL) TOYOTA TUGUEGARAO CITY (TTG) TOYOTA MANDAUE SOUTH, CEBU (TMD-S) TOYOTA NEGROS OCCIDENTAL (TNO) TOYOTA MARILAO, BULACAN, INC. (TMB) (relocated facility of Toyota Bacolod City) TOYOTA VALENCIA CITY, INC (TVC)80

NORTH North ^ Caloocan Valenzuela TOYOTA MANIL A BAY City TOYOTA AL ABANGCaloocan Quezon Marikina City City City NATIONAL CAPITAL REGION DEALERS 1 . TOYOTA ABAD SANTOS, MANILA (TAS)Manila San Juan Pasig 2. TOYOTA ALABANG, INC. (TAI) City City 3. TOYOTA BALINTAWAK, INC. (TBK) 4. TOYOTA BICUTAN, PARAÑAQUE (TBP) Mandaluyong 5. TOYOTA COMMONWEALTH, INC. (TCM) City 6. TOYOTA CUBAO, INC. (TCI) 7. TOYOTA FAIRVIEW, INC. (TFV) Makati Taguig 8. TOYOTA GLOBAL CITY, INC. (TGC) City City 9. TOYOTA MAKATI, INC. (TMI) 10. TOYOTA MANILA BAY CORP. (TMBC) Pasay 1 1 . TOYOTA MARIKINA SERVICE STATION (TMSS) City 12. TOYOTA NORTH EDSA (TNE) 13. TOYOTA OTIS, INC. (TOT)Parañaque 14. TOYOTA PASIG (TPG) City 15. TOYOTA PASONG TAMO, INC. (TPT) 16. TOYOTA QUEZON AVENUE (TQA) Las Piñas 17. TOYOTA SHAW, INC. (TSI) City 81 Muntinlupa City

Laoag PROVINCIAL DEALERS NORTH 1. TOYOTA AKLAN, INC. (TIN) ^ 2. TOYOTA ANGELES, PAMPANGA, INC. (TAP) 3. TOYOTA BACOOR, CAVITE, INC. (TBR) LUZON 4. TOYOTA BAGUIO CITY (TBG) 5. TOYOTA BATAAN, INC. (TBI) San Fernando 6. TOYOTA BATANGAS CITY, INC. (TBC) 7. TOYOTA BUTUAN (TBT) Cabarroguis 8. TOYOTA CABANATUAN CITY, INC. (TCC) 9. TOYOTA CAGAYAN DE ORO, INC. (TCO) Baguio 10. TOYOTA CALAMBA, LAGUNA, INC. (TCL) 11. TOYOTA CALAPAN CITY, INC. (TCA) San Carlos 12. TOYOTA CALBAYOG, SAMAR (TCY) 13. TOYOTA CAMARINES SUR, INC. (TCS) Tarlac Cabanatuan 14. TOYOTA CEBU CITY, INC. (TCB) 15. TOYOTA DAGUPAN CITY, INC. (TDG) Manila 16. TOYOTA DASMARINAS-CAVITE (TDM) 17. TOYOTA DAVAO CITY, INC. (TDC) Naga 18. TOYOTA DUMAGUETE CITY (TDU) Legaspi 19. TOYOTA GENERAL SANTOS, INC. (TGS) 20. TOYOTA ILIGAN CITY, INC. (TIC) PHILIPPINES VISAYAS Calbayog 21. TOYOTA ILOCOS NORTE (TIN) Tacloban 22. TOYOTA ILOILO, INC. (TIL) Puerto Kalibo 23. TOYOTA ISABELA, INC. (TIS) Princesa 24. TOYOTA KIDAPAWAN CITY (TKC) Roxas 25. TOYOTA LA UNION (TLU) 26. TOYOTA LAPU-LAPU, CEBU (TLL) Iloilo Bacolod 27. TOYOTA LIPA, BATANGAS, INC. (TLB) 28. TOYOTA MABOLO, CEBU, INC. (TML) Mandaue 29. TOYOTA MANDAUE NORTH, CEBU (TMD-N) 30. TOYOTA MANDAUE SOUTH, CEBU (TMD-S) Cebu 31. TOYOTA MARILAO, BULACAN, INC. (TMR) 32. TOYOTA MATINA,DAVAO (TTC) 33. TOYOTA NEGROS OCCIDENTAL (TNO) (formerly Toyota Bacolod City) 34. TOYOTA PLARIDEL, BULACAN (TPB) 35. TOYOTA PUERTO PRINCESA CITY, INC. (TPP) 36. TOYOTA ROXAS CITY (TRC) 37. TOYOTA SAN FERNANDO PAMPANGA, INC. (TSF) 38. TOYOTA SAN PABLO, LAGUNA, INC. (TSP) 39. TOYOTA SANTA ROSA, LAGUNA, INC. (TSR) 40. TOYOTA SILANG, CAVITE, INC. (TSC) 41. TOYOTA TACLOBAN, LEYTE, INC. (TTL) 42. TOYOTA TAGBILARAN CITY (TTB) 43. TOYOTA TAGUM CITY (TTC) 44. TOYOTA TALISAY, CEBU (TTY) 45. TOYOTA TARLAC CITY (TTA) 46. TOYOTA TAYTAY, RIZAL, INC. (TTR) 47. TOYOTA TUGUEGARAO CITY (TTG) 48. TOYOTA VALENCIA CITY, INC (TVC) 49. TOYOTA ZAMBOANGA CITY (TZC) Tagbilaran Cagayan Butuan de Oro Malaybalay Marawi Zamboanga MINDANAO Tagum Davao Kidapawan Digos General Santos82

TOYOTA ANGELESTOYOTA ILIGAN TOYOTA SANTA ROSA TOYOTA KIDAPAWAN TOYOTA MABOLOTOYOTA MATINA With demand from newly-flourishing cities now becoming more evident, TMP ensures that a Toyota dealer is closer to more customers, hence, the expansion in provinces. 83

TAMARAW FX Photo courtesy of Mike GarrettTO INNOVA: Photo courtesy of solarconflict.comTHE ICON OF ASIANUTILITY VEHICLES The Toyota Tamaraw (named for one of the Philippines’ national animals, awild carabao, or water buffalo), was introduced in December 1976, as a ¾ tonhigh-side pick-up. The Philippines was the first country where it was launched.The Tamaraw was assembled from CKD kits by Delta Motor Corporation, theToyota distributor before TMP. The Tamaraw seemed to be an answer to the question, “what is the cheapest, yetmost useful vehicle Toyota can make?” The first model looked like a box, made of thesimplest possible stampings, as flat as possible, not a curve in sight. The Tamaraw’s separate ladder chassis may have been derived from, or at leastinspired by the contemporary Hilux pickup, but it was smaller and simplified. The Tamaraw was a huge sales success, within the limited Philippine market ofthe time. Primarily because of its low price, it offered mobility to those who couldnot previously afford it. In fact, it created the AUV category, and other automakersquickly copied it. In June 1977, the same vehicle was launched in Indonesia as the ‘Kijang’, which isan acronym of “Kerjasama Indonesia-Jepang”, or “Indonesian-Japan Cooperation”. In1981, development of the vehicle, originally designed exclusively for Southeast Asia,became centered in Indonesia. In 1986, the Tamaraw FX was released in the Philippines and became an evenmore sensational success. The ubiquitous, and iconic FX revolutionized the Philippinetransport industry. It is so ingrained in the Filipino psyche that “FX” became a genericword for any AUV used for public transport. The FX created a new transport categorybetween the jeepney and the taxi. An FX ride costs more than a jeepney, but offersmuch better comfort and safety. It costs less than a taxi, but is almost as convenient.The FX was so robustly built that thousand of examples are still in use on Philippineroads today, and the parts suppliers still make spares for it. The vehicle provided an early example of Toyota’s ability—and will— to adaptto specific markets. The local names were just one indication. The vehicle wasappropriately designed for often rugged Southeast Asian conditions, and offered at anirresistible price point.84

The Tamaraw FX in its most iconic role, as a publictransport people mover. The first generation Tamaraws (green and yellow,left) competed with the jeepney, but the Tamaraw FXcreated a new category altogether. The FX carved out a niche between the jeepneyand the taxi. A ride cost a bit more than a jeepney,but offered air-conditioned comfort, and much moresafety and convenience. It costs less than a taxi,especially for longer commutes. FX boarding stations tend to be nearer offices andother workplaces, and terminate near residentialareas, so less walking is generally involved than whentaking the bus. 85

The Toyota Revo brought good looks and quiet style. Toyota had discarded the aerobox look of the ’80s in favor of a more rounded aerodynamic profile. The Revo stepped into another role, the family hauler. It took the place of station wagons in a previous era. It truly lived up to its role of utility car, powering businesses as well. Diesel engines were available, and were well liked in the Philippines for their robustness, ease of maintenance, and hauling power.86

The Innova, above, inherits the iconic Following the success of the Tamaraw FX, TMP introduced the “Revo”. Itrole of the Toyota Tamaraw. It is no longer symbolized the transportation “revolution” it had initiated. The stylish design of thebasic transportation built to a price, Revo, with all its refined features, made this model a favorite family vehicle. Whileinstead it offers levels of comfort, safety, it was still considered an AUV, with seating capacity of 10 passengers, its sedan-feelconvenience, efficiency and style befitting a interior provides better comfort than its predecessor.modern passenger vehicle. Yet, it maintainsthe ruggedness, reliability, and large cargo Then in 2004, Toyota Motor Philippines announced that it would replace theand passenger capacity that made the Revo with the new Innova in 2005, and that this model would likewise be locallyTamaraw a legend. manufactured. This was a major win for TMP and its suppliers. The Innova is now considered a Multi-Purpose Vehicle or MPV, but its aerodynamic shape is much more of a van. It is truly the spiritual successor of the Tamaraw, because it still features a separate ladder-frame chassis, albeit a far more sophisticated one. The platform is part of Toyota’s Innovative Multipurpose Vehicle (IMV) platform, and is shared with the Hilux and Fortuner. Today, the locally-produced Innova serves a variety of roles – as a family vehicle, as a service or fleet vehicle used by small and medium enterprises, or as a public transport staple. In a more affluent Southeast Asia, it now offers a much higher level of comfort and technology than the Tamaraw did, in its time. The story of the evolution from one to the other is also the story of the rise of the economies of Southeast Asia. 87

THEWELL-LOVEDVIOS The name Vios is a Latin verb that means “to move forward”. There are cheaper cars, on the market, to be The Toyota Vios is a cult car, certainly appreciated, and practically worshipped by sure. There are alsosome of its owners. Not just one, but close to a dozen Vios clubs and associations exist more expensive cars.nationwide, to celebrate the experience of owning this iconic Toyota. The current model, None of them seem towhich is the third-generation, will likely end its run soon, as the best-selling sedan of be able to compare withany class in Philippine automotive history. The previous record holder was the second- the value offered by thegeneration Vios. Cult cars are usually the opposite: rare and often, not very successful Vios. Filipino consumers,during their time. The Vios’ success is overwhelming. voting with their wallets, have chosen it above all A big part of the reason is that it has indisputably proven to be a good car, other competitors.excellently engineered and well constructed in each of the countries that makes it. It isreliable, economical, and performs well under all conditions. One of the veteran race drivers at the Vios Cup one make race stated that, even instock form, the car’s speed, handling and braking are so consistent, that one is muchmore likely to finish a race without any problems, compared to an expensive Europeanmake. The Vios wasn’t made for racing, it just happens to do it well. It was made to be acheap car, yet disproportionately well-appointed, reliable, and economical, for its price.And it seems to be practically unbreakable. There are cheaper cars, on the market, to be sure. There are also more expensive cars.None of them seem to be able to compare with the value offered by the Vios. Filipinoconsumers, voting with their wallets, have chosen it above all other competitors. Many buyers of the Vios are first-time car owners, and the design is perfect forthem. The car has very forgiving handling and brakes, and excellent engine power, andit is easy to maintain. It has also proven ideal for those wanting to make a business out of it, taxi operatorsand transport network drivers alike. As a taxi, it is so ubiquitous, that it’s unusual to seea taxi that is not a Vios. The Filipino public’s appreciation of the Vios is a great example of CustomerDelight, in which the product and service exceed the customers’ expectations. It is, formany, a car that brings a smile to their face.88

Toyota Motor Corporation (TMC) president Akio Toyoda, center, joins TMP Vice ChairAlfred V. Ty and former TMP president Michinobu Sugata, as they jubilantly celebrate the launch of the locally produced Toyota Vios in July 2013. 89

A NEW MODEL, A NEW CATEGORYRUSH L AUNCH The Toyota Rush debuted in the Philippines in May 2018, opening a newcategory in the automotive industry, Toyota, for now, calls it an “entry-SUV”. It isbased on the same platform as the Toyota Avanza (which is also a Daihatsu Xenia),and is built in Indonesia. In essence, the Rush is a ruggedly built subcompact car with a higher roadclearance, larger passenger capacity (it seats up to seven) and cargo capacity, anda longitudinal front engine driving the rear wheels (or all four wheels, in somemarkets), a traditional arrangement which is more robust than transverse engine andfront wheel drive. Although the model is new to the Philippines, the line has already existed inJapan since 1997, as the Daihatsu Terios and the Toyota Kami, and thus benefitsfrom over 20 years of development. The current Rush is the third generation model, and was launched in late 2017in Indonesia, where it is also sold as the Daihatsu Terios. One major change fromprevious models is that the spare tire is no longer mounted on the rear of the vehicle,like a jeep, but more conventionally, underneath the car, behind the rear axle. Thisallows the Rush to have a liftgate rear, which swings upwards to open, making iteasier to load the cargo area, especially in tight urban spaces. The overall look is lessrounded and “cute” (a kei-car trademark), and instead, more aggressive and elegant. In the Philippines, the Toyota badge worn by the Rush promises durability,quality, and reliability. It features a four-cylinder 1500cc VVT-i engine, with 103 hp,90

Ms. Jade Marie Sison, of Marketing Public and 5-speed manual or 4-speed automatic transmission, which sounds like the ViosRelations & Media Management of the engine, but is, in fact, the 2NR-VE developed by Daihatsu, the same engine used inMarketing Services Department, explains the Toyota Avanza and thus already well known in the Philippines.features of the brand new Toyota Rush atthe launch held at Bonifacio Global City last The Rush offers keyless push-button start, a touchscreen 8-speakerMay 4, 2018. entertainment system with rear camera, a separate Optitron system data display with memory, 17” alloy wheels, LED headlamps and tail lights, a 220mm high ground clearance, and a spacious luggage compartment. All Philippine variants are equipped with six SRS airbags. The Rush launch on May 4, 2018, drew a sizeable crowd, and prospective buyers patiently queued for test drives, or enjoyed the many different activities and games offered. Clearly, the Rush has been targetted at the family market. Once again, Toyota has assembled a formidable package and feature set that offers unprecedented value to the customer. It will be exciting to see how this new category will fare in the growing Philippine market. 91

LEXUSCONQUERINGTHE PREMIUM MARKET Raymond T. Rodriguez, president of Lexus Manila, Inc. (LMI), is a Toyota lifer — We strive to deliverhe’s never worked for any other company. LMI is a TMP dealer outlet selling Lexus the most outstandingvehicles in the country. experience to the customer. Taking careRafael G. Ongpin (RGO): Tell me about Lexus. of customers is the number one priority.Raymond T. Rodriguez (RTR): Lexus is not always number one in volume, but it isalways number one in customer satisfaction. We strive to deliver the most outstandingexperience to the customer. Taking care of customers is the number one priority. If youtake care of the customers, you will eventually be number one in volume. Last year, we had record sales of 1,251, the highest ever, for Lexus. Even if this wasdriven by the excise tax (which took effect in January 2018, raising prices dramatically), Iwould say it’s also about the people, and how we manage things. We came from 670. Thetarget was only around 850, but sales shot up because of the excise tax. Our share of thepremium market is now about 30% for passenger cars, pretty much the same as BMWand Mercedes-Benz. The three brands have around 90% of the market. If you take last year, and subtract the target, 850, we sold maybe 400 cars justbecause of this excise tax. My target for this year is supposed to be 970, but these fourhundred cars were bought in advance, so really, it should be just 570. But of course not.The Chairman (Alfred V. Ty) said, I cannot accept that. So, challenge! (Laughs). Butwe’re doing quite well. Lexus has been through an aggressive redesign. Before, it looked very close to theToyota equivalent, so some people would say, it’s just an expensive Toyota. But now, thecars are really different. Lexus has its own look. One of the successes of Lexus globally,in my opinion, is the way we design cars. It’s so sporty, very attractive, especially to theyounger market. We are coming out with a new model, the UX, smaller than an MX, and for thefirst time, the chief engineer is a lady. I met her, she’s still young, Japanese, a managingofficer. She’s more of an artist. Lexus Division has acquired its own power as a brand, within Toyota. Before,everything had to be cleared with Toyota Head Office. The one who is really on top isMr. Akio Toyoda himself. He is the one telling Toyota to keep their hands off Lexus, let92

Raymond T. Rodriguez, left, President, and Alfred V.Ty, Chairman,of Lexus Manila, Inc., with the Lexus LX 570, the company’s premiumSUV offering. 93

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GETTING TO KNOWLMI’S PRESIDENT Raymond comes from a family ofprominent doctors. His grandfather headedTala Leprosarium in Caloocan and wasable to establish a very high success ratefor treatment of leprosy. The hospitalwas renamed the Dr. Jose N. RodriguezMemorial Hospital, in his honor. Raymond attended La Salle Greenhills,and spent some time growing up in Guyana,where his father was a company doctor fora mining firm. Raymond graduated fromDe La Salle University with a degree inMechanical Engineering in 1987. He was hired by TMP in 1989 as alocalization engineer. Then, he wentfrom there to Marketing, being assignedin Service, Fleet Management, Sales, andeventually became First Vice President ofthe Division. He was then assigned by formerTMP president Sugata to the regionalheadquarters, Toyota Motor Asia Pacificin Singapore, in charge of Pakistan, fortwo years. After Singapore, Raymond returnedto Manila and rejoined TMP Marketing.He started working on the Lexus projectin 2006, and joined LMI in 2009 as anoperations executive officer, although hewas still full-time with TMP operations. Hewas assigned as LMI President in 2017. 95



We practice omotenashi, Lexus run its own brand, let them spend what they want. The guy handling Lexus atthe Japanese spirit of TMAP is Vince Socco, who came from Manila, he used to be my boss.hospitality. It is the ar tof anticipating every LMI is now number three in the region. We are doing quite well in terms of salesneed, and knowing your performance.customer. RGO: Lexus is known for excellent service. I have several friends who are Lexus The showroom lounge at Lexus Manila, owners, and they are big fans.Inc. (LMI) displays understated, minimalistmodern lines with warm colors and RTR: We are focusing on after-sales and service. Other brands, you buy the car, thanks,textures. The interior features natural goodbye. For us, we really take care of our customers.light and a lush interior garden. It needsto be as elegant as the homes of Lexus’ We practice omotenashi, the Japanese spirit of hospitality. It is the art of anticipatingpotential customers. every need, and knowing your customer. We build personal relationships, we greet our customers on birthdays, and occasions like Father’s Day, Chinese New Year, sometimes we give small gifts. We take new customers out to lunch, and introduce them to other Lexus owners. We have golf tournaments, especially the exclusive Lexus Invitational, and we even have Lexus Driver Orientation [most Lexus owners are chauffeured]. That one is very much appreciated by the owners. We are the only ones doing it. In the rare case that a spare part is not available locally, we fly it in, so we can turnaround the car in two to three days. We’ve even fixed problems for free even outside of warranty. We don’t just void warranties for reasons like the customer didn’t have their oil changed with us. We’re not perfect, no one is, but when I need to, I personally talk to the customer so we can fix any problem. Omotenashi has to come from the heart. If you are not sincere in serving, even if I pay you a lot, you will not give good service. This is not the place for you. Here, we try to be humble, and train everyone to be humble. We think how we can help our customer better. This is our advantage. 97

DEVELOPINGLOCAL SUPPLIERS’CAPABILIT Y In July 2017, 34 local parts manufacturers were confirmed as direct suppliers forthe New Vios. Of these, four were approved as participating parts makers underTMP’s CARS Project. With the support of TMP, some of these suppliers obtainedTechnical Assistance Agreements (TAA) with Toyota suppliers in Thailand, to improvetheir quality performance and close technical capability gaps in the areas of toolingdevelopment, parts testing, welding set-up and parts assembly experience. The four suppliers approved by the Board Of Investments for the CARS project are: Technol Eight Philippines Corporation (TEPC) Toyota Boshoku Philippines Corporation (TBPC) Valerie Products Manufacturing, Inc., with a technical assistance agreement with Ogihara Thailand Co. Ltd. Manly Plastics Inc., with a technical assistance agreement with Toyoda Gosei Thailand Co. Ltd. Apart from the CARS project, TMP has helped organize the Toyota Suppliers Club(TSC), which was founded on August 29, 2000, with 50 member companies. As of July2018, it now has 90 member companies. The Chairman of the TSC is Mr. Rafael Villarreal. TSC promotes mutual prosperity of both suppliers and TMP, by strengtheningcooperation among members. It undertakes activities to improve the suppliers’competitiveness in the areas of cost, quality and technical capability. TSC has formed four societies to address the areas of human resource development,safety, quality, and Toyota Production System. This year “2018,” it is establishing anEnvironment Society. Through the Toyota Suppliers Club, TMP continues to strengthen its local supplier network to achieve competitiveness and improve efficiency and productivity throughout the TMP value stream. The supplier members are engaged in the following activities: - Toyota Production System (TPS) Activities - Kaizen and QC Tools Seminars - Cost and Quality Seminars - Safety Seminars - Learning Sessions on Human Resource Development and Industrial Relations98